Former Shell Oil president rips Congress for lack of energy policy

John Hofmeister, former president of Shell Oil, says the remedy to the U.S. energy abyss lies in reforming the political system by removing the energy puzzle from the hands of politicians.

The U.S. uses 18.5 million barrels of oil daily, but produces only 7 million, meaning an increasing dependence on foreign oil.

Energy sources such as coal, oil, natural gas, nuclear energy, hydroelectric, biofuels and solar and wind energy — if developed to fullest potential — would easily keep the U.S. energy sufficient for the next 300 years.

The former president of Shell Oil Company took aim at a dysfunctional U.S. Congress and blasted politicians for turning our election system into a “perversion of our democracy” that has degraded into partisan bickering to hold onto power at all costs — regardless of the damage it inflicts on our nation.

John Hofmeister, author of the book “Why we Hate the Oil Companies,” spoke about his frustration with the nation’s leadership and its failure to craft a workable long-term energy strategy at the Second Annual California Ag Summit on the UC Davis campus in late January. About 300 attended the event.

Hofmeister’s remarks focused on what he calls “an energy abyss” in which the nation’s political leadership has failed to develop a long-term energy plan to progressively guide us into the future. He noted that eight presidents and 19 congresses have failed to develop a workable long-term solution, and warned that developing nations such as China are currently taking steps to assure they have a steady supply of both domestic and imported energy going into the future. “During the next three years China will be increasing its oil consumption from 9 million barrels a day to 15 million.”

Hofmeister, who is founder and CEO of Citizens for Affordable Energy, said that over the next few years China is planning to build 50,000 new skyscrapers, each more than 30 stories tall. “These new structures will need electricity, heat, and air conditioning, which will put new demands on the world’s energy sources.” In preparation to meet the demand, he said China has already secured $120 billion in loan guarantees to fund its state-owned oil companies. “They have made sure that their 15 million barrels of daily oil is guaranteed. They want to make sure that their growing middle-class is well cared for.”

Energy abyss

The United States, on the other hand, uses 18.5 million barrels of oil daily, but produces only 7 million, meaning that we are increasingly dependent on foreign oil. Hofmeister pointed out that at present the world consumes 88 million barrels of oil a day. “We’ll need 97 million barrels daily by 2015 and this just isn’t going to happen. What we are going to see is a demand squeeze that will increase global oil prices.”

The former head of Shell Oil said Americans had better be prepared to stand in long gas lines like the U.S. experienced in the 1970s, in which gas supplies were scarce and prices high, and gunfights, brawls and obscenities were common occurrences at neighborhood gas stations. He said the lack of a long-term energy strategy in the U.S. — a country which has many untapped oil reserves in states such as Alaska, Colorado, Montana and elsewhere — prevents these oil-rich places from providing energy because “they are off limits.”

He added that energy sources such as coal, oil, natural gas, nuclear energy, hydroelectric, biofuels and solar and wind energy — if utilized, funded and developed to their fullest potentials — would easily keep the U.S. energy sufficient for the next 300 years. “Our problem is quite simply none of our energy sources comes to material scale. For instance, the nation’s wind farms are only a tenth of the size they should be and, while the country’s automobiles are 90 percent cleaner today than in the 1990s, combustible engines still waste about 20 percent of their energy.”

He returned to warning about the “energy abyss” in the U.S. and said the remedy lies in reforming the political system by removing the energy puzzle from the hands of politicians. He said the federal system has 13 cabinet-level offices governing energy, 26 committees in Congress oversee energy matters (with some lawmakers changing every two years), and 800 federal judges across the nation who can adjudicate energy issues. “We need to change the system. We need a long-term, 50-year energy plan that extends beyond election cycles. These various committees and offices do not cooperate with one another. We need something like an Independent Regulatory Energy Commission that doesn’t answer to Washington. Energy is the lubricant for our lifestyles; it makes it all work. We are in a political, economic and cultural crisis. This energy abyss is a growing problem we have never had to face before.”
Even though popular comedian Jack Gallagher made the audience laugh during lunch time, most of the Ag summit consisted of bad news.

Population angst

Dr. Alex McCalla, UC Davis professor emeritus of Agricultural and Resource Economics, noted the challenges in feeding a global population of 7 billion that will hit 9 billion people by 2050. He said as the world’s developing nations become more prosperous, their appetites will be able to afford more animal meat, therefore their consumption of things such as corn, wheat and soybeans will decrease. However, it becomes more and more of a conundrum to increase crop yields decade after decade. “We are going to have to increase food production by 70 percent by 2050 to feed an additional 2 billion people,” he said. While population growth in countries such as China and India is exploding, most of the world’s ag land is already in play. “We have more land that can be used as agriculture in Brazil, places in Russia and Ukraine and savannah Africa, but not many more.” Stack on top of this climate change and an overall global lack of water to grow crops and unstable global markets and the situation becomes urgent.
“Can we double yields again?” he asked, on the same amount of land area like we have in the past with science, crop protection tools, synthetic fertilizers and bio crops. “The challenges for the world and California are enormous — although California is situated better than most. There’s great challenges ahead; let’s hope it can be done.”

To add to the overall angst, Army Col. Cheryl Smart, assistant professor of National Security Studies at the Industrial College of the Armed Forces, approached ag topics from a security angle. She said Pentagon officials are constantly aware of the terrorist possibilities in attacking U.S. food supplies in an increasingly unstable world, stating that such an attack “would be devastating.” She said there are some Middle Eastern countries that have exhausted their water tables, other poorer countries that have run out of funds to finance food subsidies and they are having a hard time to survive. She added that many of these countries have given their citizens small plots of land — “micro-farming” — to grow their own food in order to survive.

“Our answer in this country is that we have to concentrate on feeding ourselves,” the colonel said. “We have to look at our food supply and keep it safe, and, more importantly, make sure that it stays here in this country.”

I left the summit realizing the wisdom in hiring funnyman Gallagher to cheer up the crowd at lunch. There’s little doubt that was money well spent.